Wheat in the EU ended the week up
Euronext wheat prices rose slightly on Friday, recording a weekly gain, as covering short positions after recent lows offset poor export prospects, traders said.
December wheat futures, the most active position on the Euronext Paris exchange, closed up 0.1% to 218.75 euros ($242.31) a ton.
For the week, the contract rose 1 percent after hitting a new three-week high of 222.50 euros during Friday’s session, but again failed to hold above 220 euros, facing resistance
“Speculative short covering has sparked buying interest, although the underlying downside to wheat prices remains in place,” UK trader Frontier Agriculture said in a note.
“Russian wheat prices remain close to their lows – below US$220 per tonne FOB,” it said. The world’s largest wheat exporter continues to dominate the trade.”
Competition from cheaper supplies from the Black Sea has distracted attention from poor harvests in France and Germany, the EU’s two largest wheat producers.
On Friday, quotations for Russian wheat with 12.5% protein were virtually unchanged at about $215-217 per ton FOB for delivery via the Black Sea in September/October, while Romanian wheat with 12.5% protein was more expensive at about $232-236 per ton FOB, which is still about $20 per ton cheaper than German wheat.
Traders said Ukrainian feed wheat is also being discussed for near-term delivery at around 206-210 euros per ton in northern Germany and 204-212 euros in the Netherlands.
“The low prices offered from the Black Sea mean that Germany and France have effectively dropped out of the export market. It is not only Russia and Ukraine that are so cheap, but also other countries like Romania and Bulgaria,” the German trader said.
“Black Sea markets are barely growing despite the strength of Euronext, which is creating a big gap in prices.”
Heterogeneous crop quality, in addition to low yields, also limited export prospects from France and Germany.
Updated results for this year’s rain-affected soft wheat crop in France showed that the full weight was slightly better than previously estimated, but still mostly below generally accepted market standards.
Wheat, corn and soybean futures in Chicago declined after rising this week, with attention turning to the U.S. government’s crop forecasts for next week.
September wheat futures on Euronext fell 2.3% to 199.00 euros as participants closed out positions before expiration with the closest expiration on Tuesday.
As for oilseeds, November-dated rapeseed futures on Euronext fell 2% to €464.00 due to losses in the mineral and vegetable oil markets.
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